Chapter 3 Business and Management |
| Article 17 |
(Restriction on Concurrent Positions Held by Responsible Persons and Business Compliance)
Regulations governing concurrent serving restrictions and other matters to be complied with for the responsible persons of an issuer shall be prescribed by the Competent Authority.
The rules governing business management, operating mode, contracted merchants management, business outlets, internal control and audit, outsourcing operation, restrictions on investment, approval and reporting of financial, business and operational information and other matters to be complied with shall be prescribed by the Competent Authority. |
| Article 18 |
(Payments Received by Non-Bank issuers)
Non-bank issuers shall deposit a sufficient amount of reserve when the funds they receive from the electronic stored value cards issued reach a certain amount. Regulations governing the certain amount, percentage for the reserve, method of deposit, adjustment, audit and other matters to be complied with shall be prescribed by the Central Bank of the ROC in compliance with the Competent Authority.
Non-bank issuers shall declare trust in full or obtain full guarantee from a bank for the funds received as mentioned in the preceding paragraph less the required reserve on the next business day of receipt.
A certain percentage of the interest or other income earned from the utilization of funds received in Paragraph 1 hereof shall be set aside and deposited in a dedicated account opened with a bank to pay back to the cardholders or use it for other purposes prescribed by the Competent Authority.
The certain percentage referred to in the preceding paragraph shall be prescribed by the Competent Authority. |
| Article 19 |
(Declaration of Trust)
"Declare trust" referred to in the preceding paragraph means the issuer entering a trust agreement with a trust enterprise and depositing the funds the cardholders store in the electronic stored value cards each day into a trust account under the trust agreement on the next business day.
The funds declared trust may not be drawn unless for the following purposes:
1. To pay for the products or services provided by the contracted merchants, government fees or other fees approved by the Competent Authority.
2. To reimburse the balance in an electronic stored value card upon the request of the cardholder.
3. To make use of the trust property.
4. To dispense interest or other income earned from the trust property to the issuer. When a contracted merchant makes payment request, an issuer shall, based on the settlement results, instruct the trust enterprise to pay the contracted merchant without the act of stalling or deception.
A trust enterprise may make use of the trust property only in any of the following manners:
1. Deposit it in banks.
2. Purchase government bonds or bank debentures.
3. Purchase treasury bills or negotiable certificates of deposit.
4. Purchase other financial products approved by the Competent Authority.
A trust enterprise shall dispense the interest or other income earned from the trust property, less costs, necessary expenses and loss, to the issuer in the year of income occurred according to the trust agreement.
The mandatory and prohibitory provisions to be included in the trust agreement shall be prescribed by the Competent Authority.
The claims of the cardholders arising from the electronic stored value cards they hold over the trust property deposited with a trust enterprise shall have precedence over the claims of other creditors of the issuer and the right to compensation of the issuer's shareholders. |
| Article 20 |
(Bank Guarantee of Performance)
"Full guarantee from a bank" referred to in Article 18 herein means that the issuer shall enter a full performance guarantee agreement with a bank where the bank assumes the guarantee responsibility for the balance of funds stored by cardholders in the electronic stored value cards.
An issuer shall complete the contract renewal or enter a new contract according to Article 18 herein at least one month before the expiration of the trust contract or the guarantee agreement.
An issuer that fails to conform to the preceding paragraph is not allowed to issue new cards or accept more stored amount from the cardholders. |
| Article 21 |
(Obligation of Confidentiality)
Issuers and contracted merchants shall keep the personal information of card applicants and the use records of cardholders confidential, unless it is otherwise required by law or the Competent Authority.
Issuers shall not use the data of cardholders to engage in marketing activities on behalf of third parties. |
| Article 22 |
(Obligations to Provide and Retain Information)
Issuers shall file report on their electronic stored value card business in accordance with the rules of the Competent Authority and the Central Bank of the ROC.
Issuers of electronic stored value cards shall keep detailed transaction records of cardholders for at least five (5) years and provide the cardholders with related inquiry service.
The detailed records referred to in the preceding paragraph shall fully disclose the date of each transaction, the card number used, transaction item, transaction amount, transaction machine code and currency.
An issuer shall appoint an accountant to conduct quarterly audit of the state of compliance with Paragraph 2 of Article 18 herein, and submit the accountant's audit report to the Competent Authority for reference in one (1) month after the end of each quarter. |
| Article 23 |
(Obligation to Provide Financial Information)
An issuer shall prepare business report on the electronic stored value card business and CPA-certified financial report or other financial documents designated by the Competent Authority within four (4) months after the end of a fiscal year, and submit the same to the Competent Authority and make public announcement in fifteen (15) days after those reports have been passed by the board of directors and acknowledged by the supervisors.
The provision in the preceding paragraph on acknowledgment by the supervisors does not apply to issuers that have an audit committee established in accordance with Article 14-4 of Securities and Exchange Act. |
| Article 24 |
(Examination by Competent Authority)
The Competent Authority may at any time dispatch officers or appoint a suitable agency to examine the business, finance or other relevant items of the issuer, its contracted merchants or other related parties, or order the issuer, its contracted merchants or other related parties to submit accurate financial report, inventory of property, or other relevant information and reports within a specified period of time.
If deemed necessary, the Competent Authority may designate a professional expert or technical personnel to inspect the items, reports or information subject to examination according to the preceding paragraph, and submit an inspection report to the Competent Authority. The expenses thus incurred shall be borne by the entity being inspected. |
| Article 25 |
(Competent Authority's Act of Disposition)
If an issuer violates laws or regulations, or its articles of incorporation, or is suspected of improper management, the Competent Authority may issue an official reprimand or order it to take corrective action within a specified period of time, and may, depending on the severity of the circumstances, take the following disciplinary actions:
1. Revoke the resolutions made by the shareholders' meetings or board of directors' meetings;
2. Repeal the approval for part or all of the issuer's businesses;
3. Order the issuer to relieve its managers or employees of their offices;
4. Dismiss its directors or supervisors, or suspend them from their duties for a certain period of time; and
5. Other necessary disciplinary actions.
If directors or supervisors of an issuer are dismissed pursuant to Subparagraph 4 of the preceding paragraph, the Competent Authority shall notify the Ministry of Economic Affairs to cancel the registration of its directors and supervisors.
The Competent Authority may inform the relevant authorities or institutions to prohibit an issuer, its responsible persons, or any of its employees suspected of violating the law from transferring, delivering, or otherwise encumbering their properties, and may also request by letter that immigration authority forbids such persons from exiting the country. |
| Article 26 |
(Security of Transaction Data)
An issuer shall ensure the privacy and security of the transaction data and be responsible for the accuracy of data transfer, exchange or processing. |
| Article 27 |
(Capital Replenishment)
Where an issuer's accumulated loss exceeds one third (1/3) of its paid-in capital, the issuer shall promptly report to the Competent Authority in writing its financial statements and reasons for the loss.
The Competent Authority may require an issuer in the situation as described in the preceding paragraph to replenish its capital or restrict its business operations, and order the closedown of business if the issuer fails to replenish its capital as required within the specified period of time. |
| Article 28 |
(Exit Mechanism)
If the business or financial conditions of an issuer deteriorate so significantly that it might not be unable to pay its debts or that the interests of cardholders might be adversely affected, the Competent Authority may order the issuer to transfer its electronic stored value card business to another issuer designated by the Competent Authority.
When an issuer is dissolved, closes down business, or suspends business, or has its permit revoked or repealed so that it becomes unable to continue the electronic stored value card business, the issuer shall contact other issuer(s) to take over its electronic stored value card business, subject to the approval of the Competent Authority.
Where such issuer fails to follow the provisions in the preceding paragraph, the Competent Authority will designate other issuer(s) to assume its business. |
| Article 29 |
(Provisions for Banks)
Banks whose ratio of equity capital to risk assets meets the provision set forth in Article 44 of Banking Act and planning to engage concurrently in the electronic stored value card business shall apply to the Competent Authority for approval by submitting documentation required in Subparagraphs 1, 3, 5, 6, 8 ~ 11, and 13 of Paragraph 2, Article 7 herein. The provisions in Article 6, Articles 8 ~ 10, Paragraph 1 of Article 17, Article 19, Article 20, Paragraph 4 of Article 22, Articles 23 ~ 25, Article 27 and Article 28 herein do not apply to banks that are thus approved.
Bank issuers shall set aside reserve in accordance with the Banking Act for money received in advance in connection with the electronic stored value cards and such money is an insured object referred to in the Deposit Insurance Act.
An electronic payment institution that intends to engage concurrently in the electronic stored value card business shall apply to the Competent Authority for approval by submitting documentation required in Subparagraphs 1, 3, 5~13 of Paragraph 2, Article 7 herein. The provisions in Article 9 and Article 10 herein do not apply to electronic payment institutions that are thus approved. |
| Article 29- 1 |
An issuer shall join a trade association designated by the Competent Authority or the Electronic Payment Committee of the Bankers Association of the Republic of China ("Bankers Association").
The charter of the trade association designated by the Competent Authority and bylaws as well as rules governing the conduct of meetings of the Electronic Payment Committee of the Bankers Association referred to in the preceding paragraph, and subsequent amendments thereto shall be submitted to the Competent Authority for approval.
The businesses of the trade association designated by the Competent Authority referred to in Paragraph 1 hereof shall be subject to the guidance and supervision of the Competent Authority.
Where any directors or supervisors of the trade association referred to in the preceding paragraph is found to have violated rules and regulations, its charter, was derelict in performing his/her duties, misused his/her authority, or acted against the principle of good faith, the Competent Authority may issue corrective orders or order the trade association to discharge such director or supervisor.
The trade association designated by the Competent Authority or the Electronic Payment Committee of the Bankers Association shall undertake the following activities to help promote the sound operations of members and uphold the reputation of the industry:
1. Assist the Competent Authority in promoting and studying policies and regulations related to electronic stored value card business;
2. Draw up and periodically review common business rules or self-disciplinary rules and report such rules and subsequent changes thereto to the Competent Authority for record;
3. Provide necessary guidance to members with respect to the electronic payment business they engage in or mediate disputes therebetween; and
4. Undertake other matters as designated by the Competent Authority.
Issuers shall observe the business rules and self-disciplinary rules referred to in Subparagraph 2 of the preceding paragraph. |